Quick answer
Before bushfire, storm and cyclone season, check that your sums insured reflect current replacement costs, that flood and storm are covered as you'd expect, and that business interruption cover has a long enough indemnity period. Ask about extensions for utility outages, prevention of access and increased cost of working. Add new equipment and fit-out, and keep your policy schedule somewhere you can reach it after an event.
Key points
- Sums insured drift out of date as costs rise — check replacement values.
- Definitions matter: business.gov.au warns that terms like 'flood' vary between insurers.
- Business interruption cover and its indemnity period are often what saves a business.
- Extensions for power outages and loss of access are easy to overlook.
Nobody enjoys reading an insurance policy. But the hour you spend with it before bushfire, storm or cyclone season is one of the highest-value hours you’ll spend on the business all year. After an event is the worst time to discover the sum insured is five years old, flood isn’t covered the way you thought, or your business interruption cover runs out halfway through the rebuild.
This guide gives you twelve questions to work through with your policy and your insurer or broker. It’s written for business owners, not insurance professionals.
Why review now rather than at renewal?
Renewals tend to arrive at a busy time and get signed without much thought. And costs move: builders, equipment, fit-outs and stock all cost more than they did a few years ago. A policy that was right when you set it up can quietly become inadequate.
business.gov.au’s preparation advice is to make sure your insurance covers all the potential risks to your business, to check policy definitions because terms like “floods” vary between insurers, and to be aware that extra premium may be needed for specific disaster cover.
The twelve questions
1. Are my sums insured based on today’s replacement costs?
Check each section: building (if you own it), contents and fit-out, equipment, stock. Get a current quote or estimate for replacing each. If the sum insured is lower, you’re likely to face a shortfall after a major loss.
2. Is the policy on a replacement or indemnity basis?
Replacement (“new for old”) pays to replace with new equivalents. Indemnity pays the depreciated value. The difference can be large for older equipment.
3. How exactly is “flood” defined, and is it covered?
Ask for the definition in writing. Check storm, storm surge, rainwater run-off and actions of the sea separately — they can be treated differently.
4. Are bushfire and grassfire covered, including smoke damage?
Smoke and ash damage can ruin stock and equipment that never touched a flame. Make sure it’s included.
5. Do I have business interruption cover?
This covers lost income and ongoing costs after an insured event. For many businesses, it’s the section that decides whether they survive a major loss.
6. Is the indemnity period long enough?
The indemnity period is how long business interruption will pay. After a big regional disaster, rebuilding can take far longer than usual because builders and materials are scarce. Think about how long your worst case would really take.
7. What does business interruption cover include?
Gross profit or revenue? Wages? Rent? Increased cost of working — the extra costs of trading from somewhere else? Know which.
8. Is there cover for utility outages?
Some policies include an extension for loss of income when power, water or gas is cut off, often with conditions about where the failure occurred and a minimum outage period. See our page on power and access outages.
9. Is there prevention of access cover?
This may respond when authorities stop customers reaching your premises — a cordon, a road closure — even without damage to your site.
10. Are new assets and fit-out included?
Equipment bought during the year, a new vehicle, or a fit-out upgrade may not be on the policy unless you’ve told the insurer.
11. What are the excesses, and do they differ by event?
Some policies have higher excesses for particular events such as cyclone or flood. Know what you’d have to pay yourself.
12. What sub-limits apply?
Caps on particular categories — refrigerated stock, money, tools, outdoor items, documents — can catch people out.
How do you keep track of the answers?
A simple table in your emergency kit:
| Question | Policy says | Action needed |
|---|---|---|
| Building sum insured | ||
| Contents and fit-out | ||
| Stock | ||
| Replacement or indemnity | ||
| Flood definition | ||
| Business interruption and period | ||
| Utilities extension | ||
| Prevention of access | ||
| New assets added | ||
| Excesses by event | ||
| Sub-limits |
Keep a copy of the policy schedule with it — our business emergency grab-bag guide covers where.
What if cover is unaffordable or unavailable?
In some high-risk areas, certain covers are expensive or hard to get. If that’s your situation:
- get quotes from more than one insurer or through a broker
- consider higher excesses to keep key covers in place
- prioritise business interruption and the assets that earn your income
- build a cash buffer or a standby line of credit for the uninsured risk
- write down your plan B in your business continuity plan
Knowing you’re self-insuring part of the risk is far better than discovering it after the event. If you’d like to look at a standby facility for that gap, you can enquire here — there’s no credit check when you first enquire.
What else should you do before the season?
- Photograph your premises, equipment and stock and store the photos in the cloud.
- Check your insurer’s claims line is in your phone and your printed contact list.
- Know what your insurer expects you to do to prevent further damage after an event.
- Clear gutters, secure outdoor items and check drainage.
- Check your Australian Business Register address is current, as business.gov.au recommends, so you can show eligibility for any disaster assistance.
What if you’re already in a dispute?
If you’re reviewing your policy because a claim has already gone wrong, read our guides to documenting damage and insurance complaints and AFCA. AFCA offers free, independent dispute resolution for small businesses.
Should you use a broker?
Many small businesses buy insurance directly; others use a broker. A good broker can compare policies, explain definitions and extensions, and help with claims when something goes wrong — which can be valuable after a major event when insurers are stretched. If you do use one, ask them to walk you through these twelve questions and to put the answers in writing.
Whichever way you buy, make sure you understand:
- who to call to make a claim, and whether that line operates after hours
- what your insurer expects you to do immediately after an event (make-safe, photos, notifying)
- whether the policy’s definitions and exclusions have changed since last year
- how the claim will be paid — to you, to repairers, or in stages
How does this fit with the rest of your preparation?
Insurance is one layer of a wider plan. The others are your cash buffer, your records and your continuity arrangements. A business that has reviewed its cover, backed up its data, printed its contacts and knows its cash runway is in a far stronger position than one relying on insurance alone. Our business emergency grab-bag guide and shutdown cash runway tool cover the other layers.
What should you do straight after an event?
Knowing your policy also means knowing your first steps: make the site safe, photograph everything before cleaning up, take reasonable steps to prevent further damage, and lodge the claim promptly. Keep receipts for everything. Our guide to documenting damage for an insurance claim covers the detail, and the emergency action checklist gives you a first-day list for each type of event.
Keep the answers somewhere you’ll find them after an event, not just in the filing cabinet at the premises that might be damaged.
When insurance won’t be enough
Even with good cover, a major event usually leaves some gap — the excess, a sub-limit, the timing of the payout. If one opens up, now or after the next event, we’re here.
Expect a call from a real person who’ll ask about insurance, grants and timing as well as money. We leave your credit file alone while we talk it over; nothing is checked until you decide to proceed. In a crisis you need fewer calls, not more, so your enquiry stays with one team.
Give us straight numbers — how much, what it’s for, which state, and whether property is involved — and the first call can go straight to real options. Begin the 60-second form.
Frequently asked questions
When should I review my business insurance?
At least once a year, and ideally before the higher-risk months in your area — bushfire season in much of southern Australia, and storm and cyclone season in the north. Also review after buying major equipment or changing premises.
What is an indemnity period?
It's the maximum length of time business interruption cover will pay for lost income after an insured event. If rebuilding takes longer than the period, you're not covered for the rest.
Does business insurance cover floods?
It depends on the policy. business.gov.au warns that policy definitions vary — including the definition of flood — and that extra premium may be needed for certain disaster cover. Read the definitions and ask your insurer or broker.
What is prevention of access cover?
It's an extension to some business interruption policies that may respond when authorities prevent customers or staff reaching your premises, even if your premises aren't damaged. Terms vary widely.
How do I know if I'm underinsured?
Compare your sums insured with current replacement costs for your building (if you own it), fit-out, equipment and stock. If you haven't updated them in a few years, there's a good chance they're too low.